* US crude inventories jump on imports, refinery cuts
* CFTC chair says supports position limit exemptions
* IEA says oil prices have hit floor around $50-60
(Recasts, updates prices, market activity; changes dateline
from previous LONDON)
NEW YORK, July 29 (Reuters) - Oil dropped nearly 6 percent
on Wednesday to $63 a barrel after data showed a surge in U.S.
crude inventories on higher imports and lower refinery
activity.
Crude stocks in the world's top consumer jumped 5.1 million
barrels in the week to July 24, according to data from the U.S.
Energy Information Administration, countering analyst
expectations for an inventory draw. []
The build came as crude imports hit a six-month high and
refiners -- their profits battered by limp demand -- cut back
on runs.
Over the past four weeks, U.S. fuel consumption dropped 4.1
percent against year-ago levels, led by a 10.7 percent drop in
demand for distillates, which include key industrial fuels such
as diesel. Distillate stocks rose to the highest level in
nearly 25 years, while gasoline stockpiles fell, the EIA said.
U.S. crude <CLc1> traded down $3.95 to $63.28 a barrel by
12:38 p.m. EDT (1638 GMT). London Brent <LCOc1> fell $3.36 to
$66.52 a barrel.
"The build this week will put more pressure on oil,
especially given that we were already seeing return of risk
aversion across markets, with the U.S. dollar climbing and the
stock market lower," said Rachel Ziemba, lead energy analyst
for RGE Monitor in New York.
Optimism an economic recovery has helped push crude prices
up from below $33 a barrel in December, with investors looking
toward positive economic data for signs of a turnaround in
flagging oil demand.
U.S. stock markets [] traded lower on Wednesday and the
dollar rose broadly as investors piled into safer-havens.
[]
Further pressure came after commerce Department data showed
new durable goods orders fell 2.5 percent in June, the largest
percentage drop since January, after rising 1.3 percent in May.
[]
Falling demand due to the recession knocked crude off
record highs near $150 a barrel hit last July, clipping a
six-year rally in commodities that had been fueled by rapid
growth expansion in emerging economies such as China.
The wide swings in prices has raised concern over
speculation in commodities markets, prompting the U.S.
Commodities Futures Trading Commission to consider implementing
position limits for some commodity futures.
CFTC Gary Gensler said on Wednesday he supported exemptions
from tough new investor limits for bona fide hedgers, however,
despite worries they could limit the usefulness of position
limits. []
"While I believe that we should maintain exemptions for
bona fide hedgers, I am concerned that granting exemptions for
financial risk management can defeat the effectiveness of
position limits," he said during the second day of hearings on
tightening regulatory oversight of U.S. futures markets.
A senior analyst for the International Energy Agency said
volatile oil prices may have reached a floor.
"The evidence so far suggests that prices have probably
reached a floor which maybe around $50 to $60," Eduardo Lopez
told Reuters on the sidelines of an oil and gas conference in
Cape Town.
(Reporting by Matthew Robinson, Gene Ramos, and Robert Gibbons
in New York; Joe Brock and Barbara Lewis in London; Editing by
David Gregorio)
